Faster regulatory approvals, rising share prices, and stronger balance sheets have revived North American bank M&A over the past year, sector advisors say.

“Bank M&A has moved from an uncertainty-driven paralysis to a more confidence-driven execution,” said Mike Keeley, a deal advisor for law firm Norton Rose Fulbright.

So far this year, bank M&A volume has reached USD 22.6bn, the highest level since the equivalent period in 2023.  It comes after a major upturn in 2H25, when 83 transactions were announced, the most in any half-year since 1H21, while deal volume climbed to USD 48.7bn, the largest half-year total in 16 years.

Deal catalysts

Expedited regulatory approvals in the US under the Trump Administration have helped push up the transaction count. Jason Langan, M&A deal advisor for Deloitte, said mergers in 2026 have been getting approved in 90-100 days, roughly half the average time for the feds to review deals at the end of the Biden Administration two years ago.

“Banks don’t like being left in limbo; they want a decision,” Langan said. “The speed of the regulators is really helping make the market go.”

Rising bank share prices have also greased the M&A gears in the sector.

The stock malaise that set in with the 2H22 downturn lifted in the middle of 2025, with the KBW Nasdaq Bank Index starting to climb in March 2025 and continuing year-to-date.

“You’ve seen more stock deals or deals with stock as a larger component, so banks are using their stronger currencies to consolidate,” said Justin Hughes, managing director for Commerce Street.

Source: Mergermarket, data correct as at 25-Aug-26

Santander used its own shares to cover more than a third of the consideration in its USD 12.74bn acquisition of Connecticut-based Webster that closed 20 August – the largest financial services transaction this year. Santander is keen to use its currency for more deals, as reported.

Improved balance sheets adjusting to the higher interest rate environment have also encouraged more buyers into the marketplace.

Many banks paused or slowed M&A as they managed liquidity and assessed credit risks that weighed on valuations, Hughes said.

As institutions “fixed their balance sheets,” jettisoning low-yielding portfolios dating from the low-rate Covid era, more buyers have emerged with the financial strength to resume the search for targets, Langan said. Banks that didn’t shore up their balance sheets are now attractive take-out targets, he added.

“There’s more of a have and a have not [environment] than there’s been in a while,” Langan said.

As everyone feels less uncertainty around economics and more clarity on the regulatory approval process, people are ready to execute, Norton Rose Fulbrights’s Keeley said. Plus, the pent-up demand has many now itching to go.

“There were a lot of sellers that had been waiting for an opportunity to sell, and that window hadn’t opened for a long time at any meaningful valuation,” he said.

Valuations are now pushing closer to 2x tangible book value for stronger performers, Langan said.

Evergreen structural M&A catalysts in the industry continue to push sellers onto the sale block, including aged management and shareholders for banks without succession plans, elevated labor expenses, and heightened technology costs.

Super regional push

While advisors remain skeptical that one of the “Big Four” banks in the US – JPMorgan, Bank of America, Citigroup, and Wells Fargo – will execute a bank acquisition, they all echoed the expectation of other banks acquiring for scale.

“Folks maybe don’t touch the top four, but the next 15 banks are getting bigger and stronger,” Langan said. “A lot of the regulators want healthy competition with a lot of banks of mid-to-large-scale out there to provide options for consumers.”

Recent deals also support the theory, with Santander’s acquisition of Webster; Fifth Third’s acquisition of Comerica; and Huntington Bank’s forays into Texas last year with acquisitions of Veritex and Cadence. Santander is the 21st largest bank by US deposits, while Fifth Third ranks ninth and Huntington ranks 10th.

“Some of the super regionals are seeing inequality in their peer group in terms of size and span, so I would imagine more banks with USD 50bn to USD 250bn [in deposits] to be doing more deals to get closer to the top 10,” Langan said.

First Citizens Bank – the 13th largest bank by US deposits – was reported earlier this year to be looking for assets to grow its deposits past the USD 250bn mark.

Smaller banks too, faced with rising technology costs around cybersecurity and artificial intelligence innovation, are likely to seek acquisitions for increased scale, the advisors said.

“A lot of banks have realized that an organic growth model won’t give them the scale they need to improve efficiency or the deposits they need to improve profitability,” Keeley said.

Pennsylvania-based S&T Bank said in 1Q26 that it was in merger talks with peers in its current geographies. Univest Financial, located in the same state, is also on the lookout for M&A opportunities, its CEO said in April.

Scotiabank is in the market for tuck-ins to expand certain business lines, the firm’s CEO said in May.

Advisors agreed that the increased pace of bank M&A is likely to continue in 2H26 and into 2027, with geopolitical concerns and the Midterm elections unlikely to slow activity.

Potentially bolstering dealmaking is increasing interest from non-bank buyers.

Commerce Street, which is based in Dallas, has seen an upturn in potential acquirers in Texas and throughout the Southwest, particularly from investor groups, fintech-backed buyers, and others interested in smaller community bank charters, Hughes said.

“We’re seeing a lot more interested buyers than we’ve seen in a long time,” he said.